When you are operating a business the completion of your year end accounts is a necessary part of the process. Year end accounts will have varying degrees of complexity depending on the status and size of your business. Regardless of the status of your business you are obliged to calculate year end accounts in accordance with the following:
- Self Assessment – this can be in the form of a simple profit and loss statement. The profits of your self employed business form the basis for your personal tax calculation
- Small Limited Company – there is an obligation to file accounts at Companies House and these are due nine months after your accounting year end. The company is also obliged to file accounts at HMRC and these are due twelve months after your accounting year end. Failure to meet either deadline will result in an instant fine. The penalties increase as time goes by, and interest is also calculated on any tax liability, so dealing with HMRC requirements in a timely manner is imperative
- Larger Limited Company – should your company meet HMRC and Companies House definition of a larger company, there will be greater requirements from both. These will include more detailed accounts being filed, and possibly the accounts needing to be audited.
- Partnership – the year end accounts will reflect the performance of the business and state the balance of each partners’ current account
Not only are the preparation and filing of your year end accounts a legal obligation, they also are a valuable source of information for the following reasons:
- They give an invaluable insight into the profitability of your business
- You can draw comparisons with previous years and budgets to assess the direction of the business
- Areas of strength and/or weakness can be identified, and action taken to further or address the observations
- Decisions can be taken on the future of the business
- Financial institutions may require year end accounts to support lending decisions
- Suppliers/customers often like to look at trading history so a solid filing history can benefit your business when negotiating terms
Your year end date will be different depending on your trading status:
- For self assessment it is the 5th April in accordance with the UK tax year
- If you have a limited company it is usually determined by the date of incorporation. If you wish to change your year end it date it is a simple process
At Suretax we can prepare your year end accounts from whatever records you have available. You may have very detailed paperwork or a plastic bag full of receipts – our experienced professional team are ready and waiting and will prepare your accounts to meet HMRC requirements and give you the information you need to make financial decisions that could change the direction of your business.